Social Security retirees can't ditch Medicare, court rules

Social Security recipients sued to opt out of Medicare, saying the benefit limits their private insurance coverage. But federal appeals court rules they can't reject Medicare if they receive Social Security.

ByNedra Pickler, Associated PressFebruary 8, 2012

Former House Majority Leader Dick Armey, shown here at a Monitor breakfast in Washington in 2010, is one of five senior citizens who sued to stop their eligibility with Medicare. But a court ruled Tuesday that they can't opt out of Medicare if they want to keep their Social Security benefits.

WASHINGTON — A federal appeals court ruled Tuesday that seniors who receive Social Security cannot reject their legal right to Medicare benefits, in a rare case of Americans suing to get out of a government entitlement.

Former House Majority Leader Dick Armey is among the five senior citizens who sued to stop their automatic eligibility for Medicare. But the appeals court ruled in a split decision that the law gives them no way to opt out of their eligibility if they want to keep their Social Security benefits.

Armey, a Texas Republican, and his co-plaintiffs say their private insurers limit their coverage because they are eligible for Medicare, but they would prefer the coverage from their private insurers.

"We understand plaintiffs' frustration with their insurance situation and appreciate their desire for better private insurance coverage," Judge Brett Kavanaugh wrote in a majority opinion joined by Douglas Ginsburg, both Republican appointees. But they agreed with the Obama administration that the law says those over age 65 who enroll in Social Security are automatically entitled to Medicare Part A, which covers services including hospital, nursing home care, hospice and home health care.

The case is being funded by a group called The Fund For Personal Liberty, which says its purpose is to take on burdensome government regulations. Attorney Kent Brown, who argued the case for the plaintiffs, say they want to keep their Social Security because they believe they earned it, but none of them want Medicare Part A.

"To say that you can't decline Medicare Part A and not opt out of Social Security is outrageous," Brown said in a telephone interview from his office in Lexington, Ky. He said Congress never intended that and vowed to appeal the ruling.

Besides Armey, the plaintiffs include two other former federal employees who were covered under the Federal Employees Health Benefits Program — retired Housing and Urban Development employee Brian Hall of Catlett, Va., and retired Navy civilian engineer John J. Kraus of Plymouth Meeting, Pa. — who argue that private insurance covers more than Medicare. The two other plaintiffs are wealthy individuals — E(asterisk)Trade board member Lewis Randall of Whidbey Island, Wash., and Rabbit Semiconductor founder and retired CEO Norman Rogers of Miami — who have high deductible private insurance and prefer to pay for their health care.

The plaintiffs found an ally in Judge Karen LeCraft Henderson, a nominee of George H.W. Bush, who wrote that Congress did not authorize the Social Security Administration to penalize an individual who wants to decline Medicare.